Additional costs of buying a home.

You’ve found the home of your dreams and it’s within your
budget, whether you’re a first-time buyer or a home mover it feels like a dream
come true! But have you prepared for the additional costs of purchasing your
new home?

ARE YOU MORTGAGE READY???

There are a number of hidden costs associated with buying a
property that you may not know about until you start your mortgage application,
so we’ve put together an overview of a number of costs you might need to be
prepared for.

Stamp duty

Stamp duty is a government tax that can add thousands of
pounds to the cost of purchasing a property. It is a tax on homes of which the
thresholds and first-time buyer exemptions vary in England, Northern Ireland,
Scotland and Wales which is why seeking professional tax advice is so
important.

If you’re purchasing a second property or a buy-to-let investment then there will be an additional stamp duty surcharge to be paid on top of the normal amount so it is worth seeking professional tax advice before making a purchase.

Conveyancing

These are the fees for the legal processes when buying your
new home. They include various local searches on your potential property to
check, for example, if it’s a listed building or located in a conservation
area.

The cost of conveyancing fees can very depending on a number
of factors like the value of the property, whether it’s freehold or leasehold
and the local searches that need to be completed.

Surveys and valuation
fees

Your mortgage lender will carry out a valuation survey that
will look solely at the property’s worth – it doesn’t cover structural issues
and won’t highlight any problems with the property, and you may be liable to
cover the costs as part of your mortgage product. Dependant on the property
that you’re buying you may want also want to commission an independent report
to highlight any structural issues and problems.

There are different types of reports which will examine the
property in different ways so it worth seeking professional advice before you
go ahead with one. Depending on the property’s value and what type of report
you go for this could cost anywhere from a few hundred pounds to over one
thousand pounds.

Mortgage arrangement and
other fees

These fees are sometimes charged by mortgage companies and will
vary depending on each lenders stance and which product is selected. Some
lenders might insist that you pay the fees up front which means you won’t be
paying interest on it – others might add it to your mortgage which could be
better if you can’t afford another financial outlay at the time of purchasing
your new home.

There are also potentially a number of other fees you may
need to be prepared for such as administration fees and electronic transfer
fees to name a few. All lenders will take a different approach with regards to
costs which is why a mortgage adviser can be so invaluable.

Estate Agent Fees

It is important to factor in estate agent fees if you are
selling your current home at the same as purchasing your new one. But, if
you’re a first-time buyer, don’t worry, the seller will cover these costs!

Insurance

Insurance is an important part of any house purchase and we would recommend that everyone consider their options fully. Check out our protection products.

It is important you have the correct protection in place in
case the worst should happen. Life insurance, critical illness cover and income
protection can all provide a source of money for you or your family in your time
of need which can help cover the cost of any debts like your mortgage. Whereas
general insurance can be used to protect the economic value of your assets
against accidents, damages or loss.

Removals or furniture

If you already have your own furniture then you might need
to factor the costs of hiring a professional company to help you – unless you
have little furniture and very energetic friends to hand!

If you don’t currently own any furniture then this of course
is a definite cost you will need to factor in. Unless you’re prepared to sleep
on the floor and drink warm milk you’re going to need a bed and a fridge as
well all of the other furniture that you will want.

While this is only a brief overview of many of the
additional costs you may be faced with when purchasing a home, it does
highlight why it is worth seeking professional advice. Your mortgage adviser
will be able to find a deal that’s right for you and your personal and
financial circumstances.

Guild Mortgage Services Ltd is an appointed representative of Mortgage Intelligence Ltd which is authorised and regulated by the Financial Conduct Authority under number 305330 in respect of mortgage, insurance and consumer credit mediation activities only. Registered address: Unit 1, Mallard Close, Earls Barton, NN6 0GA. Registered in England & Wales under number 11816016.We always aim to provide a high quality service to our customers. However, if you encounter any problems and we are unable to resolve them you can take your complaint to an independent Ombudsman. Our advice is covered under the Financial Ombudsman Service https://www.financial-ombudsman.org.uk/consumer/complaints.htmYou may be able to submit a claim through the EU Online Dispute Resolution Platform https://webgate.ec.europa.eu/odr/main/?event=main.home.show if you live outside the United Kingdom or if you prefer not to deal directly with the Financial Ombudsman Service. For a copy of our privacy note, please click here
YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP PAYMENTS ON YOUR MORTGAGE. A broker fee may be charged for arranging your mortgage. A typical fee is £199. The actual fee may vary depending on individual circumstances and will be confirmed to you before proceeding with your application.